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Consumers Choose Quality Over Price When Eating Out

July 8, 2014, 02:32 pm

Panera Bread

ANN ARBOR, Mich. -- Bigger is not necessarily better when it comes to customer satisfaction in the restaurant business. A new report from the American Customer Satisfaction Index (ACSI) shows that small chains are gaining customer satisfaction as the largest chains deteriorate.

According to ACSI research, U.S. consumers ate out an average of four meals per week in 2013, marking a 60-percent increase since the end of the Great Recession. In addition to eating out more, they are happier with their restaurant dining experiences. Customer satisfaction with full-service restaurants is up 1.2 percent to an ACSI score of 82, holding a slight lead over limited-service restaurants with a score of 80.

"In a weaker economy, consumers respond to price, but as the economy improves, quality becomes more important to restaurant customers," said Claes Fornell, chairman and founder of the American Customer Satisfaction Index. "This is good news for smaller chains and individual restaurants, which customers associate with higher quality food and better service."

Customer satisfaction for smaller restaurant chains was up 2 percent to an ACSI score of 83, the best in the full-service category. On the other hand, all of the largest chains in the full-service segment experienced drops in customer satisfaction.

Outback Steakhouse and Darden's Olive Garden (both with scores of 80) topped the large chains, but Outback slipped 1 percent and Olive Garden was down 4 percent in guest satisfaction from a year ago. Red Lobster took the biggest fall, down 6 percent to a score of 78. Applebee's was also down 5 percent to a score of 78. Chili's patrons were the least satisfied, by far, registering a 5-percent decrease to an ACSI score of 74.

Meanwhile, limited-service restaurants (including fast-casual and quick-service outlets) are holding steady with an overall ACSI score of 80, and this year marked the third consecutive year that these fast-food restaurants maintained their highest-ever level of customer satisfaction.

"This is a considerable transformation for an industry that posted scores in 60s throughout the 1990s and never exceeded an ACSI score of 70 until 2001," noted David VanAmburg, ACSI director. "Price has always been a strong point for fast food, but fast-casual restaurants have been improving quality and service at such a brisk pace that customer satisfaction with fast food is nearly as high as dine-in restaurants."

Smaller is better for quick-service restaurants (QSRs), too. The aggregate ACSI score for small QSRs rose 2 percent to 84, offsetting the declines posted by many of the largest fast-food chains. These smaller chains -- including the rapidly growing fast-casual segment with brands like Panera and Chipotle -- now have a higher level of satisfaction than any of the major fast-food operators since 1994, the index's inaugural year.

Looking at the large QSRs, Subway fell out of the top spot to tie with Wendy's, and Burger King remained unchanged. Starbucks dropped 5 percent, but still led coffee rival Dunkin' Donuts. KFC saw the biggest decline at 9 percent, while Taco Bell dipped 3 percent. McDonald's held the bottom spot in the category.

The American Customer Satisfaction Index is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States. The ACSI uses data from interviews with roughly 70,000 customers annually as inputs to an econometric model for analyzing customer satisfaction with more than 230 companies in 43 industries and 10 economic sectors, as well as more than 100 services, programs and websites of federal government agencies.